Tuesday, April 17, 2012

The Bain Analysis of Romney's Campaign

When Mitt Romney worked at Bain & Company, the consulting firm where he started his career, he was taught to examine companies in a particular manner. Bain consultants studied failing companies by accumulating a very large amount of data, and then formulated ideas for how improvements could be made. The consultants debated these ideas, always taking care to support their assertions with data. When Romney planned his run for the 2012 Republican presidential nomination, he probably analyzed his failed 2008 run in much the same way that he had examined failed companies. Based on the changes Romney made in 2012, what lessons can we deduce he learned from 2008?

Romney has said that one of his lessons from 2008 was that people didn't have a clear idea of what his message was. In 2012, his basic campaign message was repeated over and over: The election is going to be about jobs and the economy, and his private-sector experience made him the most qualified to turn things around.

If you're going to make a pitch to voters, it's a good idea to make sure the voters know what the pitch is. Romney succeeded; some other candidates succeeded, while others failed. Jon Huntsman and Tim Pawlenty may have been the worst at defining a clear message for their campaigns. Rick Perry did a relatively poor job, and his message was quickly swallowed by his disastrous debate performances. Others, like Newt Gingrich and Rick Santorum, eventually defined themselves, but their messages were unattractive. Gingrich's pitch was that he was the best candidate to debate Barack Obama, but it turned out Gingrich wasn't that good at debates. Santorum wanted to focus on the family and values, but most voters weren't interested. Herman Cain succeeded at getting his "9-9-9" message out, but he went too far, defining himself too narrowly.

Another change Romney made in 2012 was to focus all of his attention on one early state, New Hampshire. In 2008, he spread his resources and attempted to land knock-out blows by doing well in Iowa and New Hampshire, as well as some later contests. Romney was able to get second place in both IA and NH, but it didn't do him much good. He concluded that taking first place was absolutely essential. Among IA, NH, and South Carolina, his choice was obvious: He had to stake everything on NH. He did put some last-minute resources into IA when the opportunity presented itself, but otherwise he ignored the state. It's no use spreading resources if you don't get any real credit for second place.

What about the manner in which Romney conducted his campaign? For those who followed both the 2008 and 2012 Republican primaries, it was apparent that Romney gave better debate performances during his second run. While it should be obvious that debates are important, Romney seems to have put in the extra effort. He may have taken a cue from 2008, when Mike Huckabee vaulted from polling near 0% to taking IA and nearly South Carolina and the nomination. Huckabee had no resources or name recognition, but he did very well in the debates. Others didn't take the debates so seriously: It's been reported that Perry spent almost no time preparing for them, and it showed.

In 2008, the various campaigns treated the primary season like an arms race, spending money long before voters even began paying attention. They had assumed that the primary season would last from early 2007 all the way through early 2008, and they didn't want to be left behind. But they misjudged the voters, most of whom didn't start following the race until 2008. Even the early-state voters didn't take notice until the autumn of 2007, and their engagement really ramped up only by December.

It appears Romney learned that lesson. Rather than blanketing the early states with ads at the beginning of 2011, he ramped up his efforts toward the end of 2011. Most telling was the fact that Romney didn't launch his deluge of negative ads (for which he had become infamous in 2008) until a couple weeks before the Iowa Caucus. He allowed Gingrich to get far ahead in the polls, and then viciously cut him down. By contrast, the Romney of 2008 attacked every candidate who got ahead of him even for a moment, and he made enemies. The Romney of 2012 was perfectly happy to see Cain or Ron Paul or Michele Bachmann do well for awhile, and if they fell of their own weight, he didn't make enemies of them.

The candidate who could have benefited the most from that lesson was Pawlenty. He spent more money than he took in, trying as hard as he could to get traction in early-to-mid 2011. The problem was that voters didn't even notice. Even worse, he spent large sums of money trying to win the Ames straw poll in August. When he failed to win, his campaign was in debt and he decided to drop out--a fatal mistake. Bachmann won Ames, but it turned out Ames didn't matter. In 2008, Romney also spent a lot of money to win the Ames straw poll, and it didn't do him any good, either.

It's conventional wisdom that Republicans always nominate the "next in line." They prefer to nominate the runner-up from the previous primary, it seems (Reagan, Bush Sr., Dole, McCain, Romney). But perhaps the real reason this occurs so frequently is that the candidates learn from the mistakes they made the first time around. In the future, candidates would do well to learn from the mistakes of past candidates, rather than spending time and money making them on their own.